TODAY The National can reveal that an independent Scotland will establish its own currency, according to proposals to be voted on by SNP members at next month’s conference.
The major policy change for the SNP will be tabled by the party’s depute leader Keith Brown and Finance Secretary Derek Mackay and promises to be a big focus of debate at the Edinburgh event – expected to be dominated by building the case for independence.
It is understood that the party leadership want to adopt the overwhelming majority of the recommendations put forward by Andrew Wilson’s Sustainable Growth Commission – but will push for a faster transition to a new Scottish currency, with no “open-ended” period of continuing to use sterling after independence.
READ MORE: Andrew Wilson: Growth Commission put forward the case Scotland needs to win independence
This move comes after concerns were raised by members at a series of National Assemblies last year.
Writing in The National today, Brown says their proposals would “reject austerity outright” and put Scotland’s economy to the fore.
READ MORE: Keith Brown: This sensible approach will maximise support for an independent Scotland
He spells out the plan for the currency, saying preparations would begin during the transition period before Independence Day and would allow the new independent Parliament to “take a decision on establishing a new currency by the end of its first term”.
He said: “We will propose that it should now be party policy that an SNP government in an independent Scotland would establish its own currency ... We propose that necessary preparations, including the work of building the institutions that we need, such as an independent central bank, would begin during the transition period.”
The development follows the publication last year of the Sustainable Growth Commission report, headed by the economist Andrew Wilson, which significantly updated the economic case for independence.
Andrew Wilson is the author of the Sustainable Growth Commission report
The policy for the 2014 independence referendum proposed a currency union with the UK – but the plan weakened when then chancellor George Osborne said the UK would not share the pound with an independent Scotland. It is the existing party policy.
Wilson proposed an independent Scotland should continue to use the pound, but not in a formal currency union with the UK.
He said we should move to a separate Scottish currency after an “extended transition period” once six key economic tests had been met which included stable public finances, a sound central bank, certainty for businesses and residents and stable foreign exchange rates.
Wilson also recommended cutting Scotland’s notional budget deficit – the amount by which public spending exceeds revenue – from an “anticipated starting point” of 5.9% at the time of leaving the UK to less than 3%.
His report considered how Scotland tied to the UK was lagging behind the economics of 12 small independent nations including Finland, Ireland, Denmark and New Zealand and how becoming independent would raise living standards.
It said: “Our central argument is that Scotland should be seeking to emulate the performance of the best small countries in the world, rather than sticking to its current position as the best of the rest of the UK regions and nations outside of the south-east of England.”
While the majority of the recommendations were warmly received by SNP members in three National Assembly meetings, those on deficit reduction and on currency were more controversial, with critics saying they would entail extending austerity. Brown addressed these concerns: “We must reject austerity outright and build sustainable public finances, so we can invest in the radical and transformative policies that will allow Scotland to fully prosper.
“We must put people to the fore. Our plans for the economy must put wellbeing on a par with prosperity, breaking down the barriers of inequality and tackling the challenges of poverty,” he said.
During the 2014 referendum, the Scottish Greens backed a new currency. Last night the party’s co-convener Patrick Harvie said: “Greens recognised many years ago that an independent Scotland would require its own currency.
“I am pleased if the SNP are finally catching up with our thinking on this issue. It would be inconceivable that an independent Scotland within the EU could be in any sort of currency union with the rest of the UK, if it’s no longer an EU member state at that point.”
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